HOW TO FILE LIENSHOW TO FILE LIENS

KIM G. JOHNSON, MANAGERKIM G. JOHNSON, MANAGERLEGAL AND COLLECTIONS LEGAL AND COLLECTIONS

DIVISIONDIVISIONMETRO REVENUE COMMISSIONMETRO REVENUE COMMISSION

The Metro Revenue Commission services the The Metro Revenue Commission services the City’s bonded indebtedness and the collection of City’s bonded indebtedness and the collection of occupational license fees on behalf of the Metro occupational license fees on behalf of the Metro

Louisville Government, Jefferson County Board of Louisville Government, Jefferson County Board of Education, the Anchorage Board of Education and Education, the Anchorage Board of Education and

the Transit Authority of River City (TARC). The the Transit Authority of River City (TARC). The Metro Revenue Commission also issues various Metro Revenue Commission also issues various special licenses and collects the transient room special licenses and collects the transient room

and insurance premiums tax for Metro Louisville. and insurance premiums tax for Metro Louisville.

HOW TO FILE LIENSHOW TO FILE LIENSFILING OF RETURNSFILING OF RETURNS

The collection process begins with the filing of The collection process begins with the filing of the appropriate returns. Once the returns have the appropriate returns. Once the returns have been filed without payment our system creates a been filed without payment our system creates a tax period with a code of UNP, which denotes tax period with a code of UNP, which denotes failure to pay.failure to pay.

The main returns filed with our agency are the The main returns filed with our agency are the Occupational License Fees (OL 3 form), Occupational License Fees (OL 3 form), Employee Withholdings (W1), and the Transient Employee Withholdings (W1), and the Transient Room (TR1M). A brief description of these forms Room (TR1M). A brief description of these forms follows.follows.

Annual Business Net Profit Occupational License Fee Return Packet (OL-3):Annual Business Net Profit Occupational License Fee Return Packet (OL-3):

This return is used by individuals, partnerships, This return is used by individuals, partnerships, and corporations which have had any business and corporations which have had any business activity in the Metro Louisville area during a activity in the Metro Louisville area during a calendar or fiscal year. The business net profit calendar or fiscal year. The business net profit is assessed at 2.2% for resident individuals all is assessed at 2.2% for resident individuals all partnerships and corporations, or 1.45% for non-partnerships and corporations, or 1.45% for non-resident Individuals. The return is due 3 ½ resident Individuals. The return is due 3 ½ months after the close of the year unless an months after the close of the year unless an extension request is submitted to this agency by extension request is submitted to this agency by the original due date of the return. the original due date of the return.

Employers Quarterly Return of Occupational License Fees Withheld (Form W-1):Employers Quarterly Return of Occupational License Fees Withheld (Form W-1):

This return is used to file the employee license This return is used to file the employee license fee on wages that were withheld by the fee on wages that were withheld by the employer on all salaries, commissions, wages, employer on all salaries, commissions, wages, bonuses, incentive payments, vacation pay, sick bonuses, incentive payments, vacation pay, sick pay, separation or severance pay, non-cash pay, separation or severance pay, non-cash fringe benefits, expense accounts to the extent fringe benefits, expense accounts to the extent not utilized for business purposes, and deferred not utilized for business purposes, and deferred compensation including employee contributions compensation including employee contributions to qualified pension plans. This return is due the to qualified pension plans. This return is due the last day of the month following the close of each last day of the month following the close of each quarter. quarter.

Monthly Transient Room Tax Return (Form TR1M):Monthly Transient Room Tax Return (Form TR1M):

This return is used to report the transient room This return is used to report the transient room tax at 7.5% of the rent for every occupancy of a tax at 7.5% of the rent for every occupancy of a suite or room. This tax is imposed on the suite or room. This tax is imposed on the proprietor of the motel, hotel, etc., not the guest-proprietor of the motel, hotel, etc., not the guest-occupant, for all persons or companies who rent occupant, for all persons or companies who rent a suite or room for a period of less than 30 a suite or room for a period of less than 30 consecutive days. The return is due the last day consecutive days. The return is due the last day of the month that follows the month of the of the month that follows the month of the tenancy. tenancy.

LETTER PROCESSLETTER PROCESS

Once the forms are filed unpaid our Once the forms are filed unpaid our letter process then begins letter process then begins automatically via our computer system, automatically via our computer system, Revtech 21.Revtech 21. The system sends five letters to the The system sends five letters to the taxpayer on each tax period asking for taxpayer on each tax period asking for payment. Thus, making a demand for payment. Thus, making a demand for payment. A letter is sent every 21 days.payment. A letter is sent every 21 days.

LETTER PROCESS (cont)LETTER PROCESS (cont)

If payment is not received If payment is not received within 20 days after within 20 days after sending the fifth letter the sending the fifth letter the delinquent tax period is delinquent tax period is transferred to the transferred to the collection and legal collection and legal divisions.divisions.

COLLECTION AND LEGAL DIVISIONCOLLECTION AND LEGAL DIVISION

Once received, division collectors will make Once received, division collectors will make three phone calls and send three letters warning three phone calls and send three letters warning the taxpayer of legal consequences should this the taxpayer of legal consequences should this debt be ignored. A reasonable payment plan debt be ignored. A reasonable payment plan may be set. In either case it will be transferred to may be set. In either case it will be transferred to the legal division unless full payment is made.the legal division unless full payment is made.

The final letter, or demand letter, advises the The final letter, or demand letter, advises the taxpayer the initiation of a civil complaint or taxpayer the initiation of a civil complaint or criminal warrant is forthcoming if payment is not criminal warrant is forthcoming if payment is not received.received.

COLLECTION PURSUITCOLLECTION PURSUITDEMAND LETTER GIVING 30 DAYS TO RESPOND_________________DEMAND LETTER GIVING 30 DAYS TO RESPOND_________________

** * * NO RESPONSE OR RETURN MAILNO RESPONSE OR RETURN MAIL DISPUTE>DISPUTE> INVESTIGATEINVESTIGATE

* ** * * *

IF GROUNDS FOR DISPUTE CLOSE * IF GROUNDS FOR DISPUTE CLOSE *COMPLAINT FILED ON 35TH DAYCOMPLAINT FILED ON 35TH DAY * *AND SUMMONS’ ISSUED IF NO GROUNDS FOR DISPUTE THEN AND SUMMONS’ ISSUED IF NO GROUNDS FOR DISPUTE THEN

** PURSUE WITH SJ OR ARRANGE PURSUE WITH SJ OR ARRANGE

IF UNABLE TO SERVE RESEARCHIF UNABLE TO SERVE RESEARCH PAYMENT PLAN SECURED BY AJ PAYMENT PLAN SECURED BY AJ * * * *

** * *IF SERVED WAIT 20 DAYSIF SERVED WAIT 20 DAYS FILE SJ FILE SJ ** * *NO RESPONSE> DJ FILED ON 25TH DAY SJ COURT DATE SET WITH NO RESPONSE> DJ FILED ON 25TH DAY SJ COURT DATE SET WITH * OUR OFFICE AND CLERK * OUR OFFICE AND CLERK

** * *DJ SIGNED (APPEARS ON CREDIT)DJ SIGNED (APPEARS ON CREDIT) NOTICE OF SUBMISSION NOTICE OF SUBMISSION

FILED & SJ SIGNED BY FILED & SJ SIGNED BY JUDGE (APPEARS ON CREDIT FILE) JUDGE (APPEARS ON CREDIT FILE)

** * * LIEN FILED 10 DAYS AFTER DJ OR SJ SIGNED LIEN FILED 10 DAYS AFTER DJ OR SJ SIGNED (APPEARS ON CREDIT & TITLE SEARCH)(APPEARS ON CREDIT & TITLE SEARCH)

THE DEMANDTHE DEMAND

A demand letter is mailed asking that the debt A demand letter is mailed asking that the debt be resolved or our office be contacted for be resolved or our office be contacted for payment arrangements within 30 days or legal payment arrangements within 30 days or legal action will be taken.action will be taken.

If the letter is not returned by the Post Office it is If the letter is not returned by the Post Office it is assumed to be a valid address for the taxpayer.assumed to be a valid address for the taxpayer.

THE COMPLAINTTHE COMPLAINT

If the taxpayer or debtor has not contacted our If the taxpayer or debtor has not contacted our office for payment arrangements a civil office for payment arrangements a civil complaint is filed and a civil summons is issued.complaint is filed and a civil summons is issued.

The complaint and summons is taken to either The complaint and summons is taken to either District or Circuit Court, depending on the District or Circuit Court, depending on the amount of the complaint, to be dropped and amount of the complaint, to be dropped and clocked. (Circuit Court if the amount is over clocked. (Circuit Court if the amount is over $4000.)$4000.)

THE COMPLAINT (CONT)THE COMPLAINT (CONT)

When the complaint is served When the complaint is served the Civil Rules give the the Civil Rules give the defendant / taxpayer 20 days defendant / taxpayer 20 days not including the day of service not including the day of service to file a response.to file a response.

During this time the taxpayer During this time the taxpayer can contact our office for can contact our office for payment arrangements. payment arrangements.

SERVICESERVICE

District or Circuit Court forwards the civil District or Circuit Court forwards the civil summons to the Sheriff’s Office to be served to summons to the Sheriff’s Office to be served to the taxpayer. (A $20 fee is assessed per the taxpayer. (A $20 fee is assessed per Defendant by the Sheriff’s Office and billed Defendant by the Sheriff’s Office and billed monthly.)monthly.)If the taxpayer is served, the legal representative If the taxpayer is served, the legal representative waits 21 days for a response from the taxpayer.waits 21 days for a response from the taxpayer.Once service is obtained, a copy of the service Once service is obtained, a copy of the service is returned to be retained in our legal file and the is returned to be retained in our legal file and the original stays in the court file. This will have the original stays in the court file. This will have the signature of the person serving the summons signature of the person serving the summons and the date served. and the date served.

SERVICE (CONT)SERVICE (CONT)

If the taxpayer is unable to be served due to an If the taxpayer is unable to be served due to an incorrect address, the account is then researched incorrect address, the account is then researched for a good address.for a good address.

If the Sheriff has made 2 – 3 attempts to serve the If the Sheriff has made 2 – 3 attempts to serve the taxpayer and is unsuccessful, our office then uses a taxpayer and is unsuccessful, our office then uses a special bailiff to serve the summons. (Our office special bailiff to serve the summons. (Our office contracts with a special bailiff approved by the contracts with a special bailiff approved by the court.)court.)

DEFAULT JUDGMENTDEFAULT JUDGMENT

If the taxpayer or debtor has not contacted us for If the taxpayer or debtor has not contacted us for payment arrangements, or filed an answer payment arrangements, or filed an answer disputing the debt with the court, then a Default disputing the debt with the court, then a Default Judgment will be filed with the court.Judgment will be filed with the court.Attached to the Default Judgment is a sworn Attached to the Default Judgment is a sworn Affidavit as to the amount owed.Affidavit as to the amount owed.The default judgment may be filed the first day The default judgment may be filed the first day after the 20 day grace period. However, our after the 20 day grace period. However, our office usually waits until the 25office usually waits until the 25thth day as a day as a courtesy to allow the taxpayer a couple of extra courtesy to allow the taxpayer a couple of extra days.days.

SUMMARY JUDGMENTSUMMARY JUDGMENT

If the taxpayer or debtor contacts our If the taxpayer or debtor contacts our office in writing or files a written answer office in writing or files a written answer with the court, then a Summary with the court, then a Summary Judgment will be filed.Judgment will be filed.

A Summary Judgment court date is set A Summary Judgment court date is set with our office and the clerk.with our office and the clerk.

Any type of judgment appears on the Any type of judgment appears on the taxpayer’s credit history.taxpayer’s credit history.

NOTICE OF SUBMISSIONNOTICE OF SUBMISSION

If no response is filed to the Summary Judgment If no response is filed to the Summary Judgment in the time frame prescribed or if a response has in the time frame prescribed or if a response has been filed, the Notice of Submission can be filed been filed, the Notice of Submission can be filed or submitted. or submitted.

In Jefferson County the time frame is usually 20 In Jefferson County the time frame is usually 20 days. However, please check with your Law days. However, please check with your Law Dept or Courts for your local procedures. Dept or Courts for your local procedures.

LIENLIEN

Once a judgment is granted by the court our Once a judgment is granted by the court our office will wait 10 days as required by law and office will wait 10 days as required by law and then file a lien against any property owned by then file a lien against any property owned by the taxpayer.the taxpayer.

A Notice of Judgment Lien document is A Notice of Judgment Lien document is prepared by the civil clerk, our attorney’s prepared by the civil clerk, our attorney’s signature is acquired, a check for the fee is signature is acquired, a check for the fee is prepared, and the document is taken to the prepared, and the document is taken to the County Clerk’s office to be filed.County Clerk’s office to be filed.

LIEN (cont)LIEN (cont)

The following information will need to be entered on the The following information will need to be entered on the Notice of Judgment Lien document: Notice of Judgment Lien document: – court case number court case number – District or Circuit Court District or Circuit Court – Court DivisionCourt Division– Name of Defendant Name of Defendant – Social Security number or Fed ID number Social Security number or Fed ID number – Date Judgment entered by Court Date Judgment entered by Court – Judgment Amount (taxes, penalty, interest thru Judgment Date) Judgment Amount (taxes, penalty, interest thru Judgment Date) – Amount of Court cost Amount of Court cost – Current balance Current balance – Attorney for your agency Attorney for your agency – Address of Defendant Address of Defendant – Address of Attorney for Defendant if representedAddress of Attorney for Defendant if represented

LIEN (cont)LIEN (cont)

A separate lien will need to be prepared for each A separate lien will need to be prepared for each defendant name in a suit.defendant name in a suit.The Judgment Lien needs to be recorded in The Judgment Lien needs to be recorded in every county where the Defendant may own every county where the Defendant may own property. If it is outside of Jefferson County, we property. If it is outside of Jefferson County, we mail the Judgment Lien and filing cost to the mail the Judgment Lien and filing cost to the county clerk’s office in the county where we want county clerk’s office in the county where we want the lien filed.the lien filed.A copy of the Notice of Judgment Lien is mailed A copy of the Notice of Judgment Lien is mailed to the Defendant and to their attorney if they are to the Defendant and to their attorney if they are represented.represented.

LIEN (cont)LIEN (cont)

Once the Judgment Lien is recorded a copy will Once the Judgment Lien is recorded a copy will be mailed back to the office. We then record the be mailed back to the office. We then record the date the Judgment Lien was filed, the Deed date the Judgment Lien was filed, the Deed Book and Page Number, the County where the Book and Page Number, the County where the lien was recorded, and the person the lien was lien was recorded, and the person the lien was recorded against, if multiple defendants.recorded against, if multiple defendants.

This document provides for that any property in This document provides for that any property in the name of the taxpayer that is transferred, the name of the taxpayer that is transferred, refinanced, or purchased will be subject to our refinanced, or purchased will be subject to our lien until it is satisfied.lien until it is satisfied.

LIEN (cont)LIEN (cont)

In addition, our lien from its date of filing will have In addition, our lien from its date of filing will have priority over most other liens filed after it, except priority over most other liens filed after it, except liens for property taxes.liens for property taxes.

LIEN RELEASE / ORDER OF LIEN RELEASE / ORDER OF SATISFACTIONSATISFACTION

Once the debt is paid in full a Lien Once the debt is paid in full a Lien Release will need to be filed with Release will need to be filed with the County Clerk’s Office.the County Clerk’s Office.

In addition to the Lien Release In addition to the Lien Release being filed, an Order of being filed, an Order of Satisfaction will need to be filed Satisfaction will need to be filed with the Court to close the case with the Court to close the case once paid in full.once paid in full.

REMINDERREMINDER

As with any legal proceeding, As with any legal proceeding, please check with your law please check with your law department for the department for the procedures in your procedures in your jurisdiction.jurisdiction.